Mesa Royalty Trust: A December Surge in Distributions

Mesa Royalty Trust (MTR) announced its trust income distribution for December 2024, marking a significant increase from the previous month. Unitholders of record on December 31, 2024 will receive distributions amounting to $0.022423076 per unit, payable on January 31, 2025. This substantial rise can be attributed to a surge in income from the New Mexico portion of the Trust's San Juan Basin properties, operated by Hilcorp San Juan LP.

The Trust received $47,632 from this source in December, compared to $8,766.51 in November, indicating a 430% increase. This significant jump in income from Hilcorp San Juan LP played a crucial role in the higher distributions, as it accounted for all the income received in December. After administrative expenses, the distributable net profits were $41,787, reflecting the Trust's increased cash flow from Hilcorp's operations.



The increase in distributions can be largely attributed to higher oil and natural gas prices, as the Trust's distributions are directly affected by commodity prices. However, it's essential to note that the Trust's distributions are also influenced by production levels, administrative expenses, and other factors. In December, administrative expenses rose to $5,845, up from $3,062.49 in November. Despite this increase, the Trust's distributable net profits were $41,787 in December, up from $5,704.02 in November.

Mesa Royalty Trust's distributions have been volatile over the past three months, with significant fluctuations in income and administrative expenses. In October 2024, the Trust paid $10,609 in administrative expenses, which rose to $13,423 in November and then decreased to $5,845 in December. This fluctuation may be attributed to varying operational costs and the Trust's efforts to maintain liquidity.

The Trust's cash reserves are a critical factor in its ability to distribute more income. In December, the Trust's distributable net profits were $41,787, but the Trust aims to increase its cash reserves to $2.0 million to provide added liquidity. Administrative expenses significantly impact the Trust's ability to achieve this goal, as they consume a substantial portion of the Trust's cash flow.

In conclusion, Mesa Royalty Trust's December 2024 distributions surged due to higher oil and natural gas prices, increased production from Hilcorp San Juan LP, and a decrease in administrative expenses. The Trust's distributions have been volatile over the past three months, highlighting the importance of monitoring commodity prices, production levels, and administrative expenses. As the Trust works to increase its cash reserves, investors should keep an eye on the Trust's ability to manage its expenses and maintain a strong cash flow.